The gradual rise in prices that erodes the purchasing power of money over time.
Inflation means each dollar buys a little less each year. Even modest inflation compounds: at 3% per year, prices roughly double in 24 years. This is why money left in cash slowly loses value, and why long-term savings are usually invested to grow faster than inflation.
At 3% inflation, $100 today has the buying power of about $74 in ten years.